On behalf of Bank One Corporation, I am pleased to have the opportunity to respond to the Commission's request for comments on the Release regarding Form 8-K Disclosure of Certain Management Transactions (the "Proposal").

Bank One strongly supports the Commission's goal of providing investors with prompt disclosure of certain transactions by the executive officers and directors ("insiders") of public companies. We do, however, have some concerns and recommendations about the ability of a reporting company to provide useful disclosure within the time frames proposed. We would urge the Commission to balance an investor's need for prompt information with a company's need for a reasonable time frame to ensure the accuracy of the information provided. In addition, as a financial holding company, we believe that some exceptions and limitations are needed to make the loan disclosure proposal more feasible for financial services companies.

I. Time Frames for Disclosure.

A. Ability to Comply with Time Frames.

The Commission has proposed that certain transactions be reported within two business days, while others would be reportable on the second business day of the week following the week in which the transaction occurred. A report on a transaction with an aggregate value not exceeding $10,000 would be deferred until the aggregate value of unreported transactions exceeded $10,000.

1. Two business days from date of trade or agreement.

With respect to some reportable transactions, we question whether reporting companies will be able to comply with this time frame. Of particular concern is the ability of a reporting company to fully and accurately report within two business days the following types of transactions: open market transactions, option exercises which involve a disposition of shares to cover tax withholding requirements, and dispositions of shares for tax withholding associated with lapses of restrictions on restricted stock awards. The following examples of typical transactions, based on Bank One's experience, illustrate the difficulty:

Example 1: Open Market Sale:

Business Day 1-Subject to Bank One's insider trading policies, Insider gives broker an order to sell 5,000 shares of Bank One stock; Insider informs Bank One staff responsible for Section 16 reporting.

Business Day 4-Broker sends confirmation (T+3 settlement) to Insider, listing number of shares sold and selling price; Insider forwards copy of confirm to Bank One staff.

Example 2: Option Exercise:

Business Day 1-Subject to Bank One insider trading policies, Insider directs Bank One's outside stock option plan administrator to: execute a cashless exercise of an option to purchase 5,000 shares, selling the requisite number of shares to pay the exercise price and withholding taxes, and then to sell the remaining shares in the open market; Insider informs Bank One staff responsible for Section 16 reporting.

Business Day 4-Administrator receives information (T+3 settlement) to generate report of the details of the option exercise and sales of shares.

Business Day 5-Administrator generates report to Insider with details of the option exercise and sales of shares.

Example 3: Lapse of Restrictions on Restricted Stock:

Business Day 1-Regularly scheduled lapse of restrictions on restricted stock previously awarded to Insider.

Business Day 2-Acting on Insider's previously provided instructions, plan administrator determines how many shares must be delivered to the company to pay withholding taxes and how many shares remain to deliver to Insider.

Business Day 6-Administrator generates report with the share details to Insider (this takes at least 5 business days and often more because the volume of restricted shares vesting on a single day could be for as many as 10,000 employees).

Note that a reporting company such as Bank One generally relies on an outside party-either a broker or employee benefit plan administrator-to provide the relevant information needed to report a transaction. The insider effecting a trade often may not immediately be aware of the actual sale price (or very possibly, prices) at which sales, particularly sales or dispositions for tax withholding purposes, are being made. As shown in the above examples, at least four to six business days may elapse before the insider-let alone Bank One-receives information necessary to make the required disclosure from the outside service provider, the only source of the relevant information. In the case of an open market transaction, a trade confirm is not due to the insider until settlement, which currently is three business days from the trade date. Without such a confirmation, it is not clear to us what a reporting company could use to validate the transaction information within two business days.

In the case of the other transactions, timely information may not be available to either the insider or Bank One depending on the volume of option exercises or restricted share tax dispositions required to be performed by the administrator on any given day. Particularly with certain employee benefit plan transactions, the plan administrator may "batch" sales on a given day so that all requested dispositions on that day for a particular stock plan are reported at a blended sales price as opposed to a specific execution price for each sale. In that instance, the reporting company is completely reliant on the administrator to provide accurate information as to the sales transaction. The insider for whom the sale was transacted would have no ability to recreate the trade for the reporting company.

If the insider disposition occurred for tax withholding reasons due to the vesting of restricted stock, it is very likely that many other employees will be similarly situated and also be making an election to dispose of stock to cover withholding. The plan administrator in this instance often supplies the actual reconciliation of these sales several days or even weeks after the actual deemed vesting date. It is not inconceivable given the amount of shares that may be involved that the actual disposition of shares occurs over more than one day. Generally, the holder of restricted shares understands that there are procedural issues involved in the vesting and realizes that it may be days or weeks before accurate information of the net share settlement to the holder will be available. Under the proposed rule, however, this information may need to be provided as soon as two business days after the vesting. The feasibility of a reporting company having accurate information to meet this short time frame is highly doubtful.

In Bank One's experience, in the case of option exercises, the plan administrator handles these requests not only for directors and executive officers, but also for thousands of other employees with exercisable options, any number of which may exercise options on any given day. In addition, the lapse of restrictions on restricted stock for thousands of employees occur at scheduled intervals throughout each year, resulting in thousands of tax withholding dispositions described in Example #3 above occurring at the same time. In order to attempt to meet the two business day time frame for reporting these events with respect to the 20-30 executive officers and directors for whom reporting is required, it may be necessary to establish a process whereby those individuals' transactions are prioritized over other employees' transactions in order to ensure timely reporting. It likely also would require some manual interference with our and our administrator's current automated processes. Prioritizing insider transactions also raises equitable concerns as to why these transactions should be administered differently from those of other employees.

2. Second business day of week following transaction.

The requirement that certain transactions be reported by the second business day of the week following the week of the transaction potentially provides sufficient time to gather the needed information. However, two potential problems exist: (a) for reportable events occurring at or near the end of the week, companies still would have insufficient time to gather information and report, and (b) grants and awards under employee benefit plans are usually made en masse, requiring extensive information gathering and reporting on simultaneous awards to all of the insiders.

The Commission is correct to distinguish these types of transactions as being less time sensitive. The time frame proposed, however, is in one instance (Friday transactions) no longer than the two business day period for transactions more significant to investors. In planning compliance with this reporting requirement, a company would have to plan all of its systems, procedural and personnel changes around the shortest time frame. Any benefit of a longer time frame is lost since a company cannot plan that it will be able to take advantage of a longer time period.

In addition, we do not believe there is any significant benefit to investors of accelerated reporting on Form 8-K of grants, awards or vesting-related dispositions under employee benefit plans. Initial grants under such plans reflect compensation decisions of the company with respect to its employees, including the insiders, rather than investment decisions by those insiders. In some cases, such grants reflect the company's policies with respect to appropriate stock ownership levels of its employees and directors. For instance, under a Bank One employee benefit plan, restorative options are issued following an employee's option exercise if the employee uses currently-owned common stock to pay a portion of the exercise price. The issuance of such restorative options will be a reportable event under this category, necessitating another report in the week following the occurrence of the option exercise-a report of questionable benefit to investors. As another example, Bank One makes annual option grants and quarterly stock grants to outside directors as part of their fee retainer. Reports on these grants are of questionable value to investors, given that director fees are described in the proxy statement for the annual meeting at which directors are elected.

B. Bank One suggested changes to time frames.

To alleviate the concerns raised above, Bank One would propose slightly longer time frames for reporting insider transactions. We do not believe that a few extra days diminishes in any material respect the value of the information provided to investors, while the additional time will provide reporting companies with a potentially sufficient period to collect and validate transaction information in order to ensure accurate filings.

1. Five (5) business days from date of transaction for open market transactions, option exercises and similar derivative transactions with an aggregate value of $250,000 or more.

We would suggest that the transactions which provide the most valuable information to investors are open market purchases and sales by insiders, insider option exercises and derivative transactions which replicate the foregoing. These types of transactions require that the insider take affirmative action to initiate the trade or exercise. Reporting on these types of transactions does provide investors with useful insight as to whether an insider's position is aligned with stockholders generally. However, we also believe that five business days rather than two business days would be an appropriate reporting period for these transactions.

A five business day period potentially provides enough time for a reporting company to accumulate and validate insider transaction information, though, as shown in Examples #1 and #2 above, it would be difficult under our current processes. The time frame is short enough, however, to give investors a relatively quick view of what an insider is doing. Five business days should be sufficient time for a company to receive a trade confirmation from a broker for any market transactions. For stock option exercises, this time frame-with some changes to current processes-should allow an administrator to reconcile whatever action was necessary and to supply some type of record to the reporting company. With these extra days, the company may have time to review these confirmations or reports and raise any questions with the information provider. With a 48 hour time frame, a reporting company barely has time to process the required filing through EDGAR; there is little time built into such a tight time frame to review or question any information received.

From past experience, Bank One knows that mistakes do happen, particularly when tax withholding information is involved. These reports do need to be reviewed and at times questioned. There realistically is very little time to do that in two days, particularly since some of that time will be devoted to putting this information into EDGAR format. With a five business day period, there is a much greater likelihood that a mistake can be caught and corrected before any filing is made. This is of particular concern to a reporting company if these Form 8-Ks are to be deemed filed under Section 18 of the Securities Exchange Act of 1934 (the "1934 Act"), and therefore incorporated in registration statements under the Securities Act of 1933 (the "1933 Act").

In addition, we suggest a threshold of $250,000, rather than $100,000, in aggregate transaction value. We believe that, for most reporting companies, including Bank One, a higher threshold would capture transactions likely to be of significant value to insiders.

2. The earlier of ten (10) business days from date of agreement or grant or the date on which a Form 4 must be filed for all other transactions covered by the Proposal.

Other routine transactions such as entering into 10b5-1 arrangements, employee benefit plan awards and vesting of restricted stock do not seem to raise investor concerns which need to be met on an expedited basis. Employee benefit plan awards or vesting are not a direct or voluntary action by the insider. The insider generally has no input on the awards or vesting schedule. Similarly 10b5-1 arrangements, while they are actions taken by an insider, are indefinite in timing and once initiated are intended to function outside of the control of the insider. These types of transactions do not seem to provide the kind of insight or information to an investor which would merit the costs and burdens of a reporting company being prepared to report these in the proposed time frame. We would propose that these types of transactions be required to be reported by the earlier of (A) ten (10) business days from the date of agreement or grant, or (B) the date on which a Form 4 would be required under Section 16 of the 1934 Act (if such a filing is so required). This would eliminate the problem we noted in subsection A.2. above, in which agreements or grants made on a Friday would be reportable in fact within only two business days of the event. The amount of time a company has to report events should not depend on how early or late in the week such event occurred, but rather should be based on the lapse of a specified number of business days from the triggering event.

We believe that it is appropriate to aggregate transactions of comparatively low value, and therefore we have no objection to the Commission's proposal that smaller transactions be aggregated prior to reporting, although we believe a threshold greater than $10,000 would be appropriate. The Commission has asked whether a $20,000, $30,000 or even a $100,000 threshold should apply. We believe a $100,000 threshold would be an appropriate level of aggregation.

II. Reporting of Loan Transactions.

For companies like Bank One whose ordinary business includes making loans, we propose that loans meeting the requirements of Instruction 3 to Regulation S-K, Item 404(c) be excluded from the reporting requirements. However, loans made by any company for the purpose of permitting an insider to purchase company stock, or loans for which company stock is pledged as collateral, should still be reported as proposed by the Commission. Bank One believes that the instructions to Item 404(c) set out reasonable parameters as to which type of insider loan need not be reported.

Bank One sees little benefit to reporting to investors that an insider has received a mortgage, auto loan, credit card or line of credit advance from one of its banks in the ordinary course of business on non-preferential terms. A loan being made by the reporting company itself or an affiliate not engaged in the business of making loans in the ordinary course of its business does raise legitimate issues for investors, and Bank One does support reporting on these types of transactions. In addition, loans made to facilitate stock purchases, option exercises or the entering or closing out of derivative positions, or loans collateralized by the reporting company's stock also raise legitimate investor concerns regardless of which entity in a reporting company family makes such a loan. Bank One believes that these stock loans should be reported. Ordinary banking arrangements, however, should not raise these issues. Item 404(c) appropriately reflects the fact that there is an extensive regulatory framework already in place limiting loans to insiders of financial services companies. It would serve no purpose to require disclosure of ordinary banking arrangements which pose no real risk to the reporting company or its stockholders.

III. Costs.

The increased costs involved in complying with the Proposal may prove quite substantial. Much of the information required to complete the filing will need to be provided by third party servicers. We question whether such servicers currently could provide this information to a reporting company within the proposed time frames. We believe significant systems changes and processing procedures will need to be instituted. Likewise, there will be a significant increase in the number of EDGAR filings made by a reporting company-another increased cost. We currently are not able to quantify all of the costs of compliance with the Proposal. However, below we have described the types of expenses that we could expect to incur:

A. Systems changes: Our and our plan administrators' current automated processes are designed to efficiently handle thousands of employees' option exercise and restricted stock transactions. Included in the processes are mechanisms for identifying director and executive officer transactions which are reportable under Section 16(a) of the 1934 Act. It is difficult to quantify the cost of layering in a mechanism for efficiently identifying and handling the Commission's proposed accelerated reporting process. In the short term, it may be necessary to prioritize insiders' transactions and manually intervene in the automated processes in order to ensure timely reporting. This may cause delays in the processing of transactions and/or loss in value for other, non-reporting employees, a cost which is not easily quantifiable. Presumably, efficient automated processes to respond to these reporting requirements can be developed over the long term, at a cost that cannot be estimated at this time. Given that Bank One, like many other reporting companies, uses a third party for plan administration, the timing of implementation of a more expedited processing/information system is somewhat out of our control.

B. EDGAR filing costs: We would anticipate significantly more Form 8-K filings at a cost of $200-$300 per filing (depending on number of pages; maximum assumes five pages), based on our current fee arrangement with our EDGAR filer. Our most recent annual report and proxy statement listed a total of 22 insiders. Assuming at least four Item 10 8-K reports for each at an average filing cost of $250 is required each year, the minimum annual cost would be approximately $22,000. In all likelihood, however, many more reports would be required, especially for executive officers, since each may make several option exercises per year, for many there will be vesting of prior restricted stock awards involving tax withholding dispositions of stock, and each will likely receive at least one stock-based compensation award per year. In addition, the total number of persons for which such reports may be required tends to fluctuate. We estimate that the number of Bank One insiders for which reporting would be required would be anywhere between 20 and 30 at any given time.

C. Personnel: It would be impractical to dedicate employee benefits staff and/or legal staff to this reporting requirement, since the time commitment-while potentially significant-would be sporadic and in many instances, such as open market transactions and option exercises, impossible to anticipate. Current staff dedicated to other duties, including at least one employee benefits professional and one legal professional, would be trained to handle such information gathering and reporting duties in addition to their current duties. Thus, it is difficult to quantify increased personnel costs, since a headcount increase is impractical, but costs in the form of staff training and staff inability to devote time to their other functions would be inevitable. Outside plan administrators likely will have similar constraints.

IV. Other.

In addition to our concerns about timing, reporting of loans, and the increased costs involved, Bank One has the following comments on other issues raised by the Commission in the Proposal:

A. Reporting on 10% beneficial owners' transactions unnecessary.

The Commission indicates in the Proposal that it does not believe the transaction disclosure requirements should apply to 10% stockholders. Bank One agrees with this position. The relationship between a reporting company and a 10% stockholder is often distant and may even be hostile. There is not necessarily any regular interaction between the company and the stockholder. Logistically, it is generally difficult enough to track transactions with executive officers and directors-individuals with whom the company has frequent contacts. Trying to monitor transactions with an outside stockholder could be logistically daunting especially if the stockholder is hostile. One can imagine situations where an unfriendly stockholder could make filing difficult for a company by providing incomplete or tardy information. A company has no practical ability to investigate or verify the information a stockholder would provide. Unless the Commission imposes a direct obligation on a 10% stockholder to timely provide accurate information to a company, there is no compelling mechanism for a stockholder to provide the information to a company. Bank One believes that the current regulatory reporting framework for trades of 10% holders (Forms 3 and 4, Rule 144 and Form 144, and Schedule 13D and 13G) provide sufficient information to investors in a timely fashion. Bank One recommends that with respect to reporting stock trades for a large stockholder, the reporting onus and liability should be on the stockholder, not the reporting company.

B. Form 8-K should not be deemed "filed" for purposes of Section 18 of the 1934 Act.

Bank One believes that Item 10 information should be treated like Item 9 information for purposes of Form 8-K. Item 10 information should not be deemed to be filed for purposes of liability under Section 18 of the 1934 Act, unless the reporting company chooses to be so subject. Given the tight time frames for reporting proposed by the Commission-and even the longer periods we have proposed above-the likelihood of mistakes and inaccuracies seem significant even for companies making every effort to be timely and accurate. Given that the application of Section 18 to this type of filing would thereafter force the incorporation by reference of the filing in every registration statement of the reporting company, thereby subjecting the company to liability for the information under the 1933 Act, even insignificant mistakes could at least raise the specter of additional significant liability. Currently, no such liability attaches to Form 3 or 4 or Schedule 13D or 13G in that these forms generally are not incorporated into 1933 Act registration statements. The increase in potential liability to a reporting company is significant with this type of incorporation. Given that a company will need to rely on its insiders and outside servicers to provide accurate information and the time frames may not allow for independent verification of this information, it would seem inequitable to impose this additional liability on a reporting company.

In no event, however, should the failure to timely file a Form 8-K for an Item 10 event cause a company to forfeit its right to use short form 1933 Act registration statements or affect its current reporting status under Rule 144. Again, the information the company is required to provide is not completely under its control. It is relying on its insiders to make it aware on a timely basis of a transaction. The company is also generally at the mercy of an outside provider to furnish the complete information of a transaction. Given the short time frames, mistakes and delinquencies will happen. An immaterial mistake or a tardy filing do not rise to a level requiring the withdrawal of short form registration statement privileges or the ability of other insiders of a reporting company (or holders of restricted stock of such a company) to avail themselves of Rule 144. The consequences of prohibiting short form registration and use of Rule 144 for a reporting company and its stockholders seem to far outweigh the consequences to investors of any error or tardiness in an Item 10 filing. If the particular stock trade which was inaccurately or tardily reported was in fact material to the offering and sale of company securities, other rules and regulations of the 1933 Act and the 1934 Act should subject the reporting company to appropriate issuer liability.

C. Format and Relationship to Section 16(a) Reporting.

The Commission has asked whether Item 10 should have a specified tabular format. We believe that a specified tabular format would be appropriate for two reasons: (1) it would facilitate comparisons by investors, and (2) it may facilitate efficiency in reporting. The use of coding similar to that used in Section 16(a) reporting would serve the second but not the first purpose, and therefore we do not recommend that such codes be used. However, it would be immensely helpful-both to reporting companies and investors-if Item 10 reports and Section 16(a) reports could be integrated in some fashion, in order to avoid duplicative reporting. We do not believe that attaching a Form 4 to the Item 10 8-K filing would be feasible, however, because it would be difficult in many instances to provide the historical transaction reconciliations required in Form 4 on an expedited basis. We are willing to work with the Commission in any efforts to integrate these related reporting requirements.

V. Conclusion.

In conclusion, we believe that the prompt disclosure of certain transactions required pursuant to the Proposal will provide useful information to investors, and reporting companies such as Bank One should be prepared to provide such disclosure. However, the time frames proposed are for the most part impractical; we propose a five (5) business day time frame for the most significant transactions, and generally a ten (10) business day time frame for those of less immediate value to investors. In addition, for financial services providers such as Bank One, the loan reporting requirements are overbroad and we propose limits consistent with Item 404(c) of Regulation S-K. While potential costs of compliance are difficult to quantify, we can expect that the episodic nature of the reporting will place burdens on current staff but that for the same reason hiring of additional staff is not practical. In addition, we expect the costs of required systems changes will be significant. We believe that the Commission's goals in requiring this disclosure can be realized without requiring additional disclosures with respect to 10% beneficial owners, and that the reports required under the Proposal should not be deemed filed for purposes of Section 18 of the 1934 Act. Finally, we believe that a specified tabular format would be appropriate for Item 10 8-Ks and that the Commission should seek to integrate Form 8-K Item 10 and Section 16(a) reporting.

I hope that the views we have shared in this letter will be helpful to the Commission as it makes its final decisions with respect to the Proposal. Thank you for considering our views. If you need further information, please do not hesitate to contact me at (312) 732-3551.